Now confirmed working on Anniversary Update, fully patched (14393) as of today with a Microsoft HotPatch - KB3216755
As per the Yubikey quote from The Register article here:http://www.theregister.co.uk/2017/02/16/win10_anniversary_borks_smartcards/
Yubico "We have confirmation from Microsoft that a hotfix has been released on the Windows Update Catalog that should solve the Windows 10 smart card login issue with the YubiKey. We do not have a timeframe when this will be available as an automatic Windows Update but it is available for a manual download and installation. We’ve done testing in our lab environment and found this has indeed solved the issue."
Link to the patch on Microsoft's catalogue is about halfway down the Registers article.